GuruFocus Updates 31 July 2010 Featured No Comment

By Ravi Nagarajan. One of Warren Buffett’s early investments during his partnership years was a small Nebraska company that manufactured windmills and farm equipment. The story of Dempster Mill Manufacturing in Beatrice, Nebraska is documented in great detail in Andrew Kilpatrick’s massive three volume set, Of Permanent Value: The Story of Warren Buffett. Mr. Buffett began acquiring shares of Dempster in 1956 and had a controlling interest by mid 1961. After gaining control, Mr. Buffett installed new management and dramatically improved the performance of the business. By 1963, performance had improved and the business was significantly overcapitalized with only 60 percent of assets utilized in the manufacturing operations. Through a reorganization that involved the sale of the operating business, excess capital was effectively returned to shareholders. Read more » »